![]() ![]() The surge of online sales in grocery items and fresh produce is unlikely to result in significant gross merchandise value growth for e-commerce companies as these are low-cost items. In contrast, restaurant food delivery services were badly hit due to restaurant closures and safety concerns, said Ming Lu, head of China TMT research at Aequitas Research. "The biggest winner is likely to be online grocers where consumers can find the cheapest price and convenience." "The last two months of quarantine has reshaped consumers' purchase and transactional behavior to shift more towards online," said William Chuang, Asia equity portfolio manager at AXA Investment Managers. and niche online grocery startup MissFresh. ![]() JD.com backer Tencent also holds stakes in Pinduoduo Inc. Apparel sales fell 18.1%, compared to a 15.6% increase a year ago.Īlibaba and rival JD.com, which have invested heavily in online groceries and cold chain supply, are best placed to take advantage of the shift in shopping behavior and are expected to battle for dominance in the online grocery space.Īlibaba's Hema and JD.com's 7Fresh supermarkets offer round-the-clock deliveries for online orders. Essential goods was another category that saw a significant growth at 7.5% during the period, but it was lower than 20.8% in 2019. READ MORE: Sign up for our weekly coronavirus newsletter here, and read our latest coverage on the crisis here.Ĭhina's online grocery market is now expected to grow 62.9% in 2020 to 264 billion yuan compared to a 29.2% growth in 2019, iiMedia Research reported March 17.ĭuring the first two months of 2020, online sales of food items increased 26.4% compared to 20.2% in the same period a year ago. The slower year-over-year sales growth was a result of low demand for high-valued discretionary items as consumer spending focused largely on cheaper groceries and essential goods. While the growth in online sales was significantly slower compared to a 19.5% rise in the year-ago period and an overall 20% increase in 2019, analysts said it was better than expected as overall retail sales plunged 20.5% year over year during the two-month period. reported that online sales of grocery, fresh produce and consumer essentials grew manifold during the quarantine, driving up the country's online retail sales of physical goods by 3% to 1.123 trillion yuan in the first two months of the year. Sales of items such as yoga mats, pajamas and kitchen utensils also surged.Īlibaba and Tencent -backed JD.com Inc. ![]() in the low-priced online grocery segment, but the broader outlook for the year remains grim as customers shun high-priced discretionary goods.Īs the country shifted to what has been dubbed a stay-at-home economy, consumers ordered fewer restaurant takeouts and cooked more, bought more home cleaning and personal hygiene products, and ordered fewer fashion and discretionary items, according to an analysis of data released by the Chinese government and e-commerce companies. The new coronavirus outbreak has significantly changed consumer behavior in China and could intensify the rivalry between Alibaba Group Holding Ltd. ![]()
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